ANUMITA MITRA

BMS3A

1)Coke and Pepsi competed for market share within the world’s beverage market.
The most intense battles were fought over the $74 billion carbonated soft drink
(CSD) industry in the United States that lasted until the mid-1990s. The Coca-Cola
drink was formulated in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia,
who sold it at drug store fountains as a ‘potion for mental and physical disorders’.
Pepsi-Cola was invented in 1893 in North Carolina by another pharmacist, Caleb
Bradham. Pepsi and Coke have historically dominated the carbonated soft drink
(CSD) market while competing fiercely with each other for market share in the U.S.
Hence, the term “Cola Wars Continue” which describes the competition. Until the late
1990s, CSD consumption in the U.S market grew at an annual rate of 3- 6%, which
created a duopoly in the CSD market. However, largely due to health issues related
to the consumption of soft drinks, consumption of CSDs in the U.S. has been
declining since the late 1990s. Porter’s five forces analysis performed on the CSD
industry shows that exclusively focusing on the CSD market will not be a profitable
strategy going forward.Pepsi and Coke focused on producing concentrate, or flavor
base, for the beverages while leaving the bottling to franchisees that are present
nationwide. The concentrate business was much more profitable than bottling due to
lower fixed costs, lower operating costs, and the brand popularity of the concentrate
producers.The concentrate industry has a low threat of entry, low bargaining power
for suppliers and low to moderate bargaining power for buyers (whereas bottlers
faced very high bargaining power from their suppliers—Coke and Pepsi), and grave
market scope for a healthy increase in profits.The rivalry here can be named as
Competition.

2)Pepsi market strategies

Brand equity:- Brand equity is a major strength of Pepsi. It has a strong image and
large customer base. Brand equity does not just help it with marketing its brand and
product portfolio but also helps retain customers. It has strengthened its brand equity
by investing in quality and technological innovation.

Global presence:- Pepsi is a global brand and sells across more than 200
countries. It has a large network of suppliers and distributors which have helped it
maintain its global presence. Pepsi’s global business is divided into six key
reportable segments that are Frito-Lay North America (FLNA), Quaker Foods North
America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-
Saharan Africa (ESSA) and Asia, Middle East and North Africa (AMENA).
Independent distributors and retailers have helped Pepsi reach every corner of the
globe. Each of these divisions has warehouses, plants, distribution centers, storage
facilities, offices and other facilities.

Pricing strategy:-
Pepsi’s pricing strategy is also a major strength. It has priced its products affordably.
This has helped Pepsi reach a large customer group throughout the globe. Affordable
pricing has also led to higher sales and revenue as well as popularity. The company
has made its products available in all corners of the world in various packs and sizes.
From small one serving packs to large family packs, its products are available in sizes
that suit varying needs. Pepsi also offers attractive deals from time to time to attract
customers.

Product portfolio:-Pepsi’s product portfolio consists of more than 20 beverages and

snacks brands. Several of them are hit products that are best sellers across the
globe. Some of them generate more than a billion in revenue each year. Frito Lay
and Pepsico had merged in 1965. The leading beverages that the company (North
America Beverages NAB) has made include Pepsi, Aquafina, Diet, Mountain Dew,
Diet Pepsi, Gatorade, Mist Twist, Mountain Dew, Propel and Tropicana.
Marketing :-Pepsi’s marketing strategy is a key strength. It is famous all over the world
for its excellent marketing. Pepsi’s advertising is a major strength. It’s name is also a
part of its logo and the company has a great advertising strategy that has helped it
become a leading brand name in the world. Pepsi uses several channels for marketing
its brand and products. In the recent years, it has started using digital channels in
plenty for growth of market share and customer base. Video marketing is a key
strategy that Pepsi has used. One of its videos achieved more than a billion views in
China. Its Greater China segment celebrated sixth year of the success of its Bring
home happiness campaign

Brand loyalty:- Pepsi’s large base of loyal customers is also a key strength. There are
billions around the world that love Pepsi and its flavours. It is why Pepsi and its
products are best sellers in most parts of the globe. Its packaging, pricing and
marketing have helped it build customer loyalty and a distinct image. Customer loyalty
brings growth and revenue. Pepsi has focused on both product quality and marketing
for making its customers its loyal fans. Its product portfolio includes more nutritious
products.

Coke market strategies- Coca Cola introduced five strategic actions to achieve its
goals which are as follows:

1. Market segmentation

Market segmentation is a strategic method to divide the market based on volume

and capacity of buyers and using appropriate methods to maximise sales and
thereby, earning profits from each segment. Coca Cola used this technique to
segment the market according to emerging markets, developing markets and
developed markets since every country in the 200 plus countries play a crucial rolein
the growth. In emerging markets, the primary focus was on increasing the sales
volume rather than profits so that it increased its customer domains and make a
strong foundation for future business. This was made possible by selling beverages
at economical rates so that higher no. of masses can enjoy it. In developing markets,
a balance was made between volume sold and pricing, whereas, in developed
countries the focus was more on profit making by offering more small packages and
premium packages like glass and aluminium bottles. In 2015, globally, price/mix rose
2 percent as did volume, helping increase organic revenue 4 percent. Coca Cola
also gained worldwide value share in their industry.

2. Brand establishment and Customer relationship

Brand establishment becomes vital while expanding an organisation‟s portfolio.

Consumers tend to trust a branded product and often spend an extra penny upon it
rather than choosing an unheard product. Brand name is also viewed as a status
quo in developed markets. Coca Cola made a right decision to invest in developing
the brand value by improving and modernising the advertisements by investing over
$250 million. These ads focused on creating an impact upon people and changed
the perspective of Coca Cola from an occasional drink to an integral part of people‟s
life. At the same time, investment was made to improve the position in energy drink
category, juices and also healthy drinks by making strategic partnerships with
Monster Beverage Corporation, Suja (a line of premium organic juices), Fairlife ultra
filtered milk etc. A major breakthrough took place in 2015 when Coca Cola
developed its first global marketing campaign. The primary objective was to establish
the „one-brand‟ strategy to bring all its sub products under one brand name „Coca-
Cola‟. The slogan „Taste the Feeling‟ launched in early 2016 emphasizes the
refreshment, taste, uplift and personal connections that are all part of enjoying an
ice-cold Coca-Cola. For the fitness-oriented consumers, it sent a broader message
that they can enjoy Coca Cola by choosing an appropriate variety of drink with
varying number of calories in caffeine.

3. Increasing financial efficiency

For any business, the ultimate goal is to have maximum returns for the investments
with maximum productivity. In order to achieve this, financial efficiency plays an
important role. Coca Cola made efforts to achieve financial flexibility by implementing
a solution known as „zero-based work‟- wherein annual budget is revised from zero
and must be justified annually at the end rather than simply carrying over at levels
established in the previous years. Also, savings mere made by choosing to advertise
carefully and cut down expenses in non-media marketing like in-store promotion.
Overall $600 million were realised by productivity improvement in 2015 which were
further used in brand making, business improvement and providing decent dividends
to shareowners. The organisation plans to use the same process to further increase
the productivity and make continuous savings, and treat it as a day-by-day process
of becoming leaner and better.

4. Increasing process efficiency

An organisation can be termed to be fully efficient when its process time is minimised
without affecting the quality. Process time plays an important role when the demand
is suddenly increased. Inefficient pre-planning and process planning will lead to
disruption in supply of high demands. In a continuous evolving market with highly
volatile consumer demands both in quantity and preferences, innovative supply
chain markets, speed, precision and empowered employees decide the winner.
Coca Cola took steps to reshape their business processes and searched for
redundant areas. It removed a layer of functional management and connected our
regional business units directly to headquarters. Further investigation led to removal
of process roadblocks and barriers which finally made it faster, smarter and more
efficient. Focus was also made to interact more with employees to make work a fun-
filled, exciting and career fulfilling environment. Employees were motivated to
nourish curiosity, learning, innovation and growth.

5. Focusing core competencies and business models

Coca Cola has developed a business model with portfolio including more than 500
brands ranging from sparkling beverages to value-added dairy and many more. Over
a billion dollars annually are generated together by few of these in retail sales. It has
managed to gather a variety of consumers thereby generating profits from all
segments irrespective of market conditions. Its primary core competency has been
the ability to manage a huge system of independent bottling partners and also
acquiring a number of bottlers under its own. The primary aim has been to improve
performance of bottling partners by increasing productivity, performance, optimizing
manufacturing and distribution systems and finally refranchising the independence of
bottling territories. All this effort finally creates value for retail and restaurant
customers. In 2015, the organisation took major steps in North America to make
company-owned bottling territories independent. The plan was to refranchise the
North America bottling system by end of 2017. A new unified bottling partner was
planned to set up in Western Europe and accordingly, a transaction was announced.
Further, improvement and refranchising has been planned for bottling system in
Southern Africa, East Africa, Indonesia and China. Coca Cola plans to reduce
company-owned bottlers to 3 percent from 18 percent of the global volume.

3) Strategies for both pepsi and coke

1. Determine the Target Audience One of the most important aspects of

a marketing strategy is to determine who the target audience is. This is one of the
basic principles for a marketer to adhere by in shaping an abiding marketing
strategy. By determining ones target audience, the next question should be what the
expectations are for any new marketing strategy. For some, the principals have
remained the same for decades and those include making money, learning
something new and having fun doing it. Asking questions about the strategy are key.
Deciding to spend a set amount on social media, because the target it to reach
entrepreneurs in a certain area or starting a new project is all about staying on target
with ones target audience.

2. Create and document your strategy Marketing departments are constantly

revisiting or re-evaluating marketing techniques or strategies but having a clearly
outlined plan in place based on conditions of satisfaction, can help alleviate any
miscommunication with vendors or staff, as well as keeping the entire team on the
same page. By sharing one document, employees know their role and what they’re
expected to bring to the table. It may seem simple, but in the end, it will help save
you time and money. Using a worldwide marketing calendar divided by months and
categories that are relevant for ones business is a simple technique. A tech start-ups
list of categories might include product launches, audience acquisition, marketing,
public relations, social media, advertising, and brand assets.

3. Make it personal Before personalization became a brand in itself, marketing was

always about making it personal. Keeping it personal is more of a challenge with
marketing automation but the basics still prevail. In order to acquire and retain loyal
customers, and keep followers engaged, personalized one-to-one marketing is no
longer an option, but is a requirement. Personal touches and one on one
engagement results or is driven by the need to make an emotional connection above
all else. Millennial in particular are looking for that emotional connection to a brand -
which can result in brand loyalty - and word of mouth referrals and online reviews.
Bring it down to brass tacks and consider what makes one a loyal customer. As an
example, a seating host at a local pub may know ones favourite spot or the waiter
may bring ones favourite scotch to the table. A restaurant owner always knows its
best to personally address consumers while getting personal with consumers
equates to more emotionally connected customers. It is human nature and despite
massive shifts and advances in technology, the human touch still counts for a great
deal in marketing and communications.

4. Remember: Content is (still) king Content marketing is marketing and it is rising

to flood tide levels. However, good writing and developing quality content should
become the rule, not the exception, regardless of industry. Content marketing has
emerged from being a part of a marketing strategy to one of the core strategies, yet it
can be time consuming when done in-house; meanwhile, if you outsource it, it can
cost between $2,000-$20,000 per month. It’s important to determine what the team
can manage and when to hire a specialist. Have a team member with graphic design
experience? Keep that in-house. Need someone to write copy? Hire a copywriter.
Whenever possible, try and use strategies that will save time. If the content
resources are tight, don’t try and build everything from scratch. Good content
marketing is time consuming to produce yet there are a few strategies that help
speed up the process. Delegating the writing or research to competent team
members, running regular columns that share the same basic format, and creating
new content that supports or enhances existing content can save you time.

5. Build marketing partnerships

Marketing partnerships have a number of benefits to push a marketing campaign

and build alliances. For starters, when collaborating with someone else, enterprises
tend to deliver better content. Additionally, marketing partnerships are cheaper to
create, see success more quickly, and expose the brand to a new audience. For
example, prior to being acquired by eBay, Half.com worked the town of Halfway,
Oregon, to change its name to Half.com in exchange for stock, Internet access, and
other giveaways. The tactic gained a lot of attention for the textbook rental company.
Another example was when Converse teamed up with Guitar Centre to record music
entitled "Rubber Tracks." The content was then used to create a series of YouTube
videos that focused on the musicians.

6. Start collaborating with Influencers

Another way to gain a new audience and extend brand awareness is by collaborating
with the top influencers in ones industry. As an example, home improvement store
Lowe's allowed "top designers and mom bloggers" to take over its Instagram account
for a few days at a time. By allowing influencers to share inspirational content,
Lowe's was able to tap into a new audience.

7. Be the solution - start helping customers solve a problem

As a way to build brand loyalty, providing solutions for customers is an excellent

method to create a lasting impression on a customer. According to HubSpot, "You're
in business because you provide solutions." Creating how-to content, offering
exclusives that are relevant to customers, making their lives easier, responding and
listening are all key techniques whether apps/tools, social channels, newsletters or
outreach creates them.

8. Initiate a Forum - let customers interact

No matter the product or service you're offering, your customers want to interact with
your company, or at least other customers. As an example, AMC created an online
tool that allowed you to Mad Man Yourself. American Express connects small-
business owners to each other and helpful resources through its OPEN Forum.

9. Get employees - outside of the marketing department - engaged and

involved

Let employees be your biggest champions and brand advocates. Sponsorship and
community outreach help introduce a company to activities or events that affect the
entire company. Sponsoring a road race that raises money for cancer research or
creating a video that taps into the allegiance of the brand, will motivate employees to
share the videos with friends and family.

10. Use big data to target customers.

Big data is now helping retailers target specific customers and big data can be used
to predict purchasing trends. As an example, Red Roof Inn uses cancelled flight
information to send messages to stranded travellers . A pizza chain uses data to
send out coupons to customers who are experiencing bad weather or power
outages. In short, big data can be used to predict purchasing trends. With this
information, you can get in touch with consumers before they search for your
products or services.